BC Exchange after intervention boosts dollar triggered

SAO PAULO (Reuters)-After a recent shot of the dollar, the Central Bank announced on Friday that will elevate the intervention in the foreign exchange market next week with the additional offering of swap contracts, which are equivalent to the future sale of American currency, In addition to keeping the auctions of the contracts expire in June, as had been doing since the beginning of the month.
Next Monday, the Central Bank will do two auctions: one for scrolling of 50700 contracts that expire in June and not yet rolled this month. In addition, will hold another auction hard hours earlier, to the offer of 5000 new contracts due in July this year.
The volume offered in the auction for scrolling of the contracts expire in June has been reduced by BC of 8,900 to 4,225 thousand contracts. On the other hand, the Monetary Authority is not signaled until when will last not scroll-related interventions of swap contracts.
With that, the Central Bank extends the duration of the scrolling of the contracts expire in June, which ended on Friday with the daily offer of 8,900 contracts, while signals that can act more strongly, auctioning additional contracts.
Last week, the Central Bank reported that would roll swap contracts for the fourth consecutive month, but stressed that would offer the market a greater volume of operations for "smooth moves in the foreign exchange market".
The closed this Friday the Royal 3.6008, highest level in nearly two years. From February to April, the dollar has advanced more than 10% before the real, with 5,54% gain only in the last three weeks, on fears with the trajectory of interest rates in the US and fears about the future of the country's economic relationship with Iran and China.
On Tuesday, the President of BC, Ilan Goldfajn, considered normal behavior of the Exchange in relation to what is happening in the world, in an interview with GloboNews.
On Friday, an additional factor pressured the dollar in the domestic market: the electoral uncertainty. On Monday, the dissemination of research CNT/MDA, which should pick up where they're going to voters vote for former President of the STF Joaquim Barbosa (PSB).
A few months of the presidential election of October, that painting is still uncertain. Investors fear that a candidate they consider less committed to fiscal adjustment.
The strengthening of the dollar tends to push inflation and can influence the behaviour of monetary policy.
In foreign markets, the dollar worked in low before a basketof coins, but stormed to the fourth week, longer sequence since the fourth quarter of 2016, with markets increasingly optimistic about the Outlook for the U.S. currency in the the next few weeks.
On Friday, the Central Bank sold, for the seventh session, full firm up to 8,900 cambiaistradicionais swaps contracts, equivalent to the future sale of dollars, .115 rolando3 billion of the total 5.650 billion bucks WINS in June.
If you keep and sell the new daily volume of 4,225 contracts, the BC will have rolled all the contracts that expire next month.